In the Supreme Court of the United States

No. 14-915 In the Supreme Court of the United States REBECCA FRIEDRICHS, ET AL., Petitioners, v. CALIFORNIA TEACHERS ASSOCIATION, ET AL., Respondents. On Writ of Certiorari to the United States Court of Appeals for the Ninth Circuit BRIEF AMICUS CURIAE OF THE BUCKEYE INSTITUTE FOR PUBLIC POLICY SOLUTIONS IN SUPPORT OF PETITIONERS John J. Park, Jr. Counsel of Record for Amicus Curiae Strickland Brockington Lewis LLP 1170 Peachtree Street NE Suite 2200 Atlanta, GA 30309 678.347.2208 jjp@sbllaw.net Robert Alt President and CEO The Buckeye Institute for Public Policy Solutions 88 East Broad Street Suite 1120 Columbus, Ohio 43215 614.224.4422

i TABLE OF CONTENTS TABLE OF CONTENTS TABLE OF AUTHORITIES i iii STATEMENT OF AMICUS CURIAE 1 SUMMARY OF ARGUMENT 2 ARGUMENT 3 1. Introduction 3 2. Union membership is unlikely to decline significantly in response to a ruling in favor of the Friedrichs Petitioners. 4 A. Giving dissenting union members greater freedom to disaffiliate is unlikely to affect union membership significantly. 4 B. The number of likely opt-outs is smaller than the number of covered non-union members. 6 3. The enactment of a right-to-work law in Indiana has not reduced union spending. 9 4. Union leadership can respond by refocusing its attention on actions that are likely to increase worker satisfaction with the union and their jobs. 10 A. Union membership does not correlate with job satisfaction. 11

ii B. The solution is for union leaders to pay less attention to political matters and more attention to their members and their priorities. 12 CONCLUSION 15

iii TABLE OF AUTHORITIES Cases Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977) 2,3,14 Harris v. Quinn, 134 S. Ct. 2618 (2014) passim Knox v. SEIU, 132 S. Ct. 2277 (2012) 5 Rules 37.6 1 Other Authorities B. Collins, Right to Work Laws: Legislative Background and Empirical Research (Cong. Res. Serv. 2014) 5 Daniel G. Gallagher & George Strauss Union Membership Attitudes and Participation, in THE STATE OF THE UNIONS (1991), 139-174 14 James Sherk, Right-to-Work Laws Don t Lower Private-Sector Pay (Heritage Foundation Issue Brief No. 4457, September 1, 2015) 8 James Sherk, Unions Charge Higher Dues and Pay Their Officers Higher Salaries in Non-Right-To- Work States, Heritage Foundation Backgrounder No. 2987 at 6-7 (Jan. 26, 2015), available at http://perma.cc/9b5a-c9w6 9

iv Michael Gordon and Angelo S. Denisi, A Re- Examination of the Relationship Between Job Satisfaction and Union Membership, 48 Ind. & Lab. Rel. Rev. 222 (1995) 11 Ronald Meng, The Relationship Between Unions and Job Satisfaction, 22 Applied Econ. 1635 (1990) 11 Right To Work Not Decreasing Union Membership, Indiana Public Media (July 25, 2014), available at http://perma.cc/a6nd-s4kg 5 Russell S. Sobel, Empirical Evidence on the Union Free-Rider Problem: Do Right-to-Work Laws Matter? The Military College of South Carolina School of Business Administration, http://sobelrs.people.cofc.edu/all%20pubs%20pdf/ Do%20Right-to-Work%20Laws%20Matter.pdf 6 Tom Lampman, Surprising Results from Indiana s Right-to-Work Law, (Sept. 4, 2015) available at http://buckeyeinstitute.org/uploads/files/surprising_ Results_from_Indianas_Right-to-Work_Law.pdf 5 http://www.washingtonpost.com/news/wonkblog/wp/ 2015/07/01/the-supreme-courts-threat-to-gut-unionsis-giving-the-labor-movement-new-life 12 http://www.washingtonpost.com/blogs/wonkblogs/wp/ 2014/07/01/why-quinn-v-harris-isnt-as-bad-forworkers-as-it-sounds 13

1 STATEMENT OF AMICUS CURIAE This amicus brief is submitted by the Buckeye Institute for Public Policy Solutions (the Buckeye Institute ). 1 The Buckeye Institute was founded in 1989 as an independent research and educational institution a think tank to formulate and promote free-market solutions for Ohio s most pressing public policy problems. The staff at the Buckeye Institute accomplishes the organization s mission by performing timely and reliable research on key issues, compiling and synthesizing data, formulating free-market policies, and marketing those public policy solutions for implementation in Ohio and replication across the country. The Buckeye Institute is located directly across from the Ohio Statehouse on Capitol Square in Columbus, where it assists executive and legislative branch policymakers by providing ideas, research, and data to enable the lawmakers effectiveness in advocating free-market public policy solutions. The Buckeye Institute is a non-partisan, nonprofit, tax-exempt organization, as defined by I.R.C. 501(c)(3). It has long advocated policies that guarantee to workers a genuine choice as to whether to join a union or spend their money to support a union. The Buckeye Institute files and 1 Pursuant to Rule 37.6, Amicus Curiae affirms that no counsel for any party authored this brief in whole or in part, and no counsel or party made a monetary contribution intended to fund the preparation or submission of this brief. No person other than Amicus Curiae or their counsel made a monetary contribution to the brief s preparation or submission. The parties have filed blanket consent waivers with the Court consenting to the filing of all amicus briefs.

2 joins amicus briefs that are consistent with its mission and goals. Examples of recent amicus efforts include the briefs it filed in Center for Competitive Politics v. Harris, No. 15-152 and Mason Companies v. Testa, Supreme Court of Ohio, No. 15-0794. SUMMARY OF ARGUMENT This Court s decision in Abood v. Detroit Bd. of Educ., 431 U.S. 209 (1977), rests on the belief that unions can assess agency fees against nonmembers covered by a union contract because the union performs a service that benefits all members of the bargaining unit. In Harris v. Quinn, 134 S. Ct. 2618 (2014), the dissenters contended that, because this assessment has been ongoing since Abood on 1977, the apple cart should not be upset. That contention in turn rests on the view that unions need the help. Nothing could be further from the truth. The enactment of right-to-work laws has not killed the unions. Rather, in both Indiana and Oklahoma, union membership increased after those states enacted right-to-work laws. Union spending in Indiana also increased. And, union officials have responded by increasing their efforts to serve their members and stepping up their recruitment of nonmembers. Put simply, the evidence shows that the unions do not need Abood.

3 ARGUMENT 1. Introduction In Harris v. Quinn, this Court noted that a critical pillar of the Abood Court s analysis rests on an unsupported empirical assumption, namely, that the principle of exclusive representation in the public sector is dependent on a union or agency shop. 134 S. Ct. at 2634. It went on to show why that unsupported empirical assumption was unsupported for two reasons Id. First, as the Court observed, A union s status as exclusive bargaining agent and the right to collect an agency fee from non-members are not inextricably linked. Id. at 2640. The benefits of labor peace can be achieved without requiring non-members to contribute agency fees, as the experience of unions in some federal agencies shows. 2 Second, the benefits received by personal assistants in Illinois after SEIU began to represent them could not be shown to be unachievable without the agency fees on nonmembers. Id. at 2641. Given the unsupported nature of the asserted importance of exclusive representation in the public sector, what effects are likely to flow from 2 In her dissent, Justice Kagan also recognized that there is no inextricabl[e] connection between exclusive representation and the need to collect agency fees from non-members. As the dissent points out, while the American Federation of Government Employees represented some 650,000 federal employees in 2012, fewer than half of them were dues-paying members. Harris v. Quinn, 134 S. Ct. at 2657, fn. 5 (Kagan, J., dissenting)(citing R. Kearney & P. Mareschal, Labor Relations in the Public Sector 26 (5th ed. 2014)).

4 ending the mandatory payment of agency fees to those exclusive representatives? Nonunion members can be protected from the First Amendment harms created by the compulsory collection of agency fees without harming unions or their would-be voluntary members. In fact, a ruling in favor of the Friedrichs Petitioners is likely to encourage union leadership to pay more attention to the needs and desires of union membership and, thereby, increase membership s satisfaction with their union. 2. Union membership is unlikely to decline significantly in response to a ruling in favor of the Friedrichs Petitioners. A ruling in favor of the Friedrichs Petitioners will enable some public union members to opt out of paying some or all of their agency fees. Any expectation that the result will be catastrophic for the public unions is not well founded for two reasons. First, the experience in states that have recently enacted right-to-work laws does not support fears of a dramatic loss in union membership. Second, labor relations research regarding free ridership does not suggest a dramatic change. A. Giving dissenting union members greater freedom to disaffiliate is unlikely to affect union membership significantly. Some believe that a state s enactment of a right-to-work law will start a rush for the doors on the part of union members. The recent enactments of right-to-work laws by Indiana and Oklahoma do not, however, confirm that view.

5 As a general matter, disaffiliation and deunionization has been going on for some time. Indeed, it is a long-term trend that is plainly independent of this Court s decisions in Harris v. Quinn and Knox v. SEIU, 132 S. Ct. 2277 (2012). More to the point, that long term decline in unionization is also independent of [right-to-work] policies. B. Collins, Right to Work Laws: Legislative Background and Empirical Research (Cong. Res. Serv. 2014), at 9 ( Collins ). [U]nion membership rates have declined in both [right-to-work] and union security states since 1983. The share of workers covered by a collective bargaining contract (i.e., union members plus covered workers who are not members) has followed a similar trend. Id. That trend has, however, been bucked in Indiana and Oklahoma, both of which recently enacted right-to-work laws. In both states, the rate of growth in the unionized population increased after the right-to-work laws became effective. Indiana s experience with the enactment of a right to work law in 2012 and its aftermath are far from union busting. Tom Lampman, Surprising Results from Indiana s Right-to-Work Law, (Sept. 4, 2015) at 4 available at http://buckeyeinstitute.org/uploads/files/surprising_ Results_from_Indianas_Right-to-Work_Law.pdf (last viewed September 8, 2015) ( Lampman ). In Indiana, union membership decreased in 2009 and again in 2012, when the law was passed. But, it has since recovered, increasing substantially in 2014 to a level as close to the national average as it has been since 2008. Id.; see also Right To Work Not

6 Decreasing Union Membership, Indiana Public Media (July 25, 2014), available at http://perma.cc/a6nd-s4kg (Indiana added 3,000 union members in 2013, the first full year after its enactment of a right-to-work law.). Lampman, a Buckeye Institute scholar, concludes that nothing in the data collected so far suggests that Indiana s right-to-work law has harmed unions ability to recruit or retain members. Lampman at 5. The results from Oklahoma are to similar effect. While Oklahoma is less unionized than the nation overall, the rate of growth in the unionized population in Oklahoma increased to a level greater than the national level after the right-to-work law was enacted. Lampman at 5-6. B. The number of likely opt-outs is smaller than the number of covered non-union members. Any increase in the number of free riders that is likely to result from a ruling in favor of the Friedrichs Petitioners is unlikely to be significant. Put simply, if the Friedrichs Petitioners were required to join the union (instead of not joining and paying the agency fee), some would join, and more would likely look for other nonunion work. That conclusion flows from research regarding the nature and extent of free ridership. As one scholar has concluded, right-to-work laws can simultaneously lead to free riding and have a small effect on union membership. Russell S. Sobel, Empirical Evidence on the Union Free-Rider Problem: Do Right-to-Work Laws Matter? The Military College of South Carolina School of

7 Business Administration, accessed September 9, 2015, http://sobelrs.people.cofc.edu/all%20pubs%20pdf/ Do%20Right-to-Work%20Laws%20Matter.pdf ( Sobel ). Based on his research, Sobel estimates that no more than 30 percent of the covered nonmembers would become union members if they were forced to, and that approximately 70 percent of the covered nonmembers in [right-to-work] states would switch to nonunion jobs if [right-to-work] laws were repealed. Id. at 361. Sobel divides covered non-union members into true free riders and induced free riders. He defines true free riders as those who are not currently paying the costs of membership because they know they will receive the benefits of coverage anyway. Sobel at 348. In contrast induced free riders would opt out of union membership by finding a nonunion job because they value the benefits of coverage less than their jobs. Sobel at 348. They are only induced to take the union-covered job because they do not have to pay the cost of membership. Id. Sobel notes that it is important to distinguish between true and induced free riders. [I]f [right-towork] laws were to be repealed and union shops were formed, only the true free riders would become and remain union members. Id. at 348. Conversely, the induced free riders would look for a nonunion job. [T]he greater proportion of the total covered nonmembers that are induced riders, the less union membership is affected by [right-to-work] laws. Id. Sobel s analysis of survey data yields estimates of the number of true and induced free

8 riders. For true free riders, the average of his estimates from 5 models is 14.83% for non-right-towork states, and 14.29% for right-to-work states, and an overall average of 14.62%. Sobel at 358-59. He observes that, while there is a larger percent of covered workers who are not union members in [right-to-work] states, there is not a large difference in the proportion of the covered nonmembers who are true free riders. Id. at 359. The limit on the likely number of new disaffiliations that would occur if unions are barred from collecting agency fees from nonmembers can be seen in two ways. First, nationally, about 17% of the workers covered by a union contract are nonmembers in right-to-work states; they are about 7% of the total in union security states. James Sherk, Right-to-Work Laws Don t Lower Private-Sector Pay (Heritage Foundation Issue Brief No. 4457, September 1, 2015); see also Sobel at 349, 361. The 17% and 7% figures should be seen to include both true free riders and induced free riders. Sobel found that approximately 70 percent of the covered nonmembers in right to-work states are induced free riders, who would look for a nonunion job if the right-to-work law was repealed. That 70% of the 7% would represent the likely limit of the effect of a ruling in favor of the Friedrichs Petitioners. Accordingly, the number of likely opt-outs is limited, which helps to explain why the enactment of rightto-work laws in Indiana and Oklahoma did not lead to catastrophic losses in union membership.

9 3. The enactment of a right-to-work law in Indiana has not reduced union spending. As a general matter, union dues should be expected to be more reasonable and to reflect the value of market services provided more closely when employees have a choice about whether to support a union financially. James Sherk notes that union dues are on average 10% lower in right-to-work states than in states where nonmembers can be compelled to pay agency fees. See James Sherk, Unions Charge Higher Dues and Pay Their Officers Higher Salaries in Non-Right-To-Work States, Heritage Foundation Backgrounder No. 2987 at 6-7 (Jan. 26, 2015) ( Sherk ), available at http://perma.cc/9b5a-c9w6. He explains that unions act like corporations when using their monopoly power in that both tend to raise prices when their customers have no other options. Id. at 7. That said, Indiana s move to voluntary membership through the enactment of a right-towork law did not starve the unions of funds. Rather, gross spending for the state s larger unions has increased, and its allocation is largely unchanged. In short, the loss of some agency fees did not have a substantial effect on union activities. Predictably, Indiana s unions increased their political spending during the legislative debate over the right-to-work law. Since the [right-to-work] law was enacted, spending by the state s large unions did not taper off or return to earlier levels. Instead, average spending by these unions has risen significantly and is now well above the spending

10 averages seen before the law was passed. Lampman at 1-2. While union spending in Indiana has increased, the state s right to work law has had virtually no meaningful effect on how Indiana unions spend their money and allocate their resources. Lampman at 2. Spending on representational activities increased slightly in 2013 and 2014, and the percentage of spending on overhead and administration went down slightly. Id. Spending on other activities is comparable to what it was in 2010 and 2011. Id. at 3. Lampman also explains how the changed allocation in union spending is good for the unions: Id. at 3. Higher representational spending and lower overhead costs signal that unions may be becoming more competitive and more concerned about their membership. Without the forced agency fees from non-members, unions must become more efficient and prove themselves more attractive to workers in order to boost and maintain their membership. These are positive steps for unions and the workers they represent. 4. Union leadership can respond by refocusing its attention on actions that are likely to increase worker satisfaction with the union and their jobs. Labor relations research shows that union membership does not improve union members satisfaction with their jobs. Some union leaders see

11 the challenge as one to be met through their efforts, not by using the state s power to coerce nonmembers to pay agency fees. A. Union membership does not correlate with job satisfaction. One of the most consistent findings in the industrial relations literature is that job satisfaction is lower among unionized workers than nonunionized workers. Michael E. Gordon & Angelo S. Denisi, A Re-Examination of the Relationship Between Union Membership and Job Satisfaction, 48 Ind. & Lab. Rel. Rev. 222 (1995) at 222; see also Ronald Meng, The Relationship Between Unions and Job Satisfaction, 22 Applied Economics 1635, 1635 ( The empirical results tend to be uniform. Union members report significantly less job satisfaction than their non-union counterparts. )( Meng ). As two other scholars put it, [I]n general there is evidence that while unions may have a strong positive effect on money wages, they have a strong and negative effect on job satisfaction. Jane H. Lillydahl & Larry D. Singell, Job Satisfaction, Salaries and Unions: The Determination of University Faculty Compensation, 12 Econ. of Educ. Rev. 233, 233 (1993)( Lillydahl & Singell). Lillydahl and Singell note, One of the more robust findings in the literature is that union workers express more job dissatisfaction than nonunion workers. Lillydahl & Singell at 234. They looked at unionized and nonunionized universities and found that full and associate professors at the unionized schools earned more than their nonunion counterparts. Id. at 235. Even so, the effect of union

12 membership on job satisfaction is negative, which means that union membership is associated with aspects of one s job other than salary. Id. at 238. Lillydahl and Singell explain, [U]nion faculties express lower levels of satisfaction with the quality of the university environment, the support services for teaching and research, and the authority they have over their work assignments. Id. at 242. Ronald Meng has reached similar conclusions with respect to the attitudes of Canadian union members toward their unions. He found that unionized workers are more satisfied with their compensation and job security than they are with other aspects of their jobs, like how interesting they are, whether they re free to decide what work they will do, and whether they have influence over their superior s decisionmaking. Id. at 1639-42, 1646. If union membership does not correlate with job satisfaction, it makes little sense to compel nonmembers to support unions with agency fees. Rather, unions should convince workers of their value. B. The solution is for union leaders to pay less attention to political matters and more attention to their members and their priorities. A short time ago, the Washington Post reported that it took mortal danger for some unions to realize they ve taken their membership for granted. See http://www.washingtonpost.com/news/wonkblog/wp/2 015/07/01/the-supreme-courts-threat-to-gut-unionsis-giving-the-labor-movement-new-life. One union

13 activist explained, A lot of people have lost faith in the union [AFSCME], because they haven t seen anyone. Id. Union leaders are reaching [out to] workers who may have been paying agency fees for years and never had any contact with a union representative. Id. In the same way, after this Court s decision in Harris v. Quinn, Secretary-Treasurer Gary Casteel of the United Auto Workers recognized the need for management to pay attention to members. He saw that right-to-work laws were not the end of unions, but a spur to activity. Casteel explained, If I go on an organizing drive, I can tell these workers, If you don t like this arrangement, you don t have to belong. Versus, If we get 50 percent of you, then all of you have to belong whether you like it or not. I don t even like the way that sounds, because it s a voluntary system, and if you don t think the system s earning its keep, then you don t have to pay. See http://www.washingtonpost.com/blogs/wonkblogs/wp/ 2014/07/01/why-quinn-v-harris-isnt-as-bad-forworkers-as-it-sounds. Instead of relying on state coercion to generate agency fees, union leadership concerned about the size of membership rolls could choose to follow the lead of the AFSCME and UAW officials in the stories above. Union leaders could reach out to members and covered nonmembers and sell them on the benefits of union membership. Union officials could focus their attention on the priorities of their members, including their administrative overhead costs. More specifically, [i]tems such as wages, fringe benefits, health

14 insurance, and job security consistently rank at the top of the members lists of priorities. Job content and quality of work life issues come lower down. Political goals are quite low. Daniel G. Gallagher & George Strauss Union Membership Attitudes and Participation, in THE STATE OF THE UNIONS (1991)( Gallagher and Strauss ), 139 at 143; see also Meng at 1639 n. 8 ( By politicizing their members unions lead workers to report less jib satisfaction. ). Gallagher and Strauss also explain, Membership satisfaction is based, in part, on how well the union meets expectations with regard to traditional collective bargaining bread-and-butter issues. However, to a surprising extent satisfaction is also strongly related to internal union process, for example, whether officers listen to the members, handle grievances fairly, provide feedback, and permit members to have a say in the union s governance. Gallagher & Strauss, at 167-68. Finally, unions in right-to-work states are more conservative in their spending on overhead costs, which contribute little to employee satisfaction. One econometric study found that union officials paid themselves an average of $20,000 more in union security states than in right-to-work states (even after controlling for broader economic conditions in each state). Sherk at 11. In short, unions are capable of standing on their own. They don t need Abood s help.

15 CONCLUSION For the foregoing reasons and those advanced by Petitioners, this Court should reverse the judgment of the United States Court of Appeals for the Ninth Circuit. Respectfully submitted, John J. Park, Jr. Counsel of Record for Amicus Curiae Strickland Brockington Lewis LLP 1170 Peachtree Street NE, Suite 2200 Atlanta, GA 30309 678.347.2208 jjp@sbllaw.net Robert Alt President and CEO The Buckeye Institute for Public Policy Solutions 88 East Broad Street Suite 1120 Columbus, Ohio 43215 614.224.4422